Newsletter Feature


Malaysia-U.S. Relations:
The Sky is NOT the Limit

Ilango Karuppannan presented the following Keynote address at ACWA's November 8, 2007, Formal Evening Program.

Ladies and Gentlemen,

First and foremost I would like to express my heartfelt gratitude to the Akron Council on World Affairs for inviting me to this program. It is indeed an honor for me to speak at this event especially since so many of my eminent diplomatic colleagues have also spoken here before me. Before I proceed any further I would like to thank Ms. Jane Walker Snider, Executive Director of the Akron Council on World Affairs, for her personal interest in putting up this program and for the excellent arrangements made for my visit.

In the synopsis of my talk I had indicated that the title of my presentation would be “50 Years of Malaysia-US Relations: Looking to the Future”. However, when I was writing the full text of my presentation I thought that a more apt title would be “Malaysia-US Relations: The Sky is NOT the limit”. I hope that at the end of my presentation you will be equally convinced that the sky is indeed NOT the limit in so far as the relations between Malaysia and the United States are concerned.

I would like begin by drawing your attention to the many similarities between the two countries. Take our flags for example. They are practically indistinguishable. Even our political structures are somewhat similar. Malaysia is a federal system just like the United States. We have 13 states in our Federation while the United States has grown from 13 states to 50.

You might be interested to know that Malaysia and the United States are also united by an obscure historical fact. Having lost the American Revolutionary War and surrendered at the Battle of Yorktown in 1781, the British recalled its commander, Lord Cornwallis and sent him to the Far East to take charge of its colonies there. With that began the British colonization of Malaysia. In fact in the state of Penang today, there is a place named Fort Cornwallis. Hence in a curious way you gained your independence and we lost ours. Of course I am dramatizing the issue a little but I wish to underscore the point that even history seems to have bound our two countries together.

Now fast forward to 31 August 1957 when Malaysia gained independence from the British. The United States was one of the 16 countries that recognized Malaysia’s independence on that very day marking the beginning of a natural friendship that has stood the test of time. What made the relationship natural? I would argue that it is because of the numerous shared values, principles and perspectives that have shaped and facilitated interaction among our governments and peoples. Let me elaborate.

Foundations of Malaysia-United States Friendship

Despite being a young democracy, Malaysia has always been committed to values such as freedom of economic pursuit, religious and cultural freedom as well political freedoms that come with being a democracy. Early on the Malaysian leaders had deliberately decided to retain the system we inherited from the British and use it to our advantage rather than experimenting with alternative forms of governance that many countries tried in the heady days of post-colonialism. In fact we went to great lengths to preserve the British system. For several years after independence we still had English civil servants, teachers and judges in the country.

Today I can say with confidence that democracy is permanently entrenched in Malaysia. Since our independence we have had 11 general elections. Foreign observers who have observed these elections have reported them to be fair and free. In these elections opposition political parties have contested freely. In fact the opposition has always managed to retain a number of seats in the parliament and state governments.

At present, one of the State governments is under opposition rule. At one time we have had up to two states under the opposition. The next general election must be held before April 2009. While I cannot predict when the elections would be held and what its outcome would be I can certainly tell that it will be free and fair.

Malaysia has also been committed to an open market system. We did not nationalize any of the British industries when we became independent. Instead we focused our energies and ingenuity to further developing our trade and investment relations with the rest of the world. Malaysia today is one of the most open economies with external trade making up for more than 200 percent of our Gross Domestic Product. In 2006 Malaysia’s external trade crossed the RM 1 trillion mark or about US$ 291.5 billion.

Despite this record the Malaysian government continues to identify and remove administrative constraints which add to the cost of doing business and institute the necessary measures and initiatives to reduce cost and enhance efficiency and competitiveness. Recently Malaysia was ranked the 6th most competitive economy in Asia, after Singapore, Japan, Hong Kong, Taiwan and South Korea; and 26th worldwide based on the recently-released Global Competitiveness Index, covering 125 countries.

In addition to political and economic freedoms, Malaysia also guarantees individual liberties such as religious and cultural freedom. That is why Malaysia has been able to overcome the inherent strains of a culturally, ethnically and religiously heterogeneous society and become a modern and progressive state. In fact today is a major holiday in Malaysia as we celebrate Deepavali, a Hindu religious holiday. I happen to be a Hindu. I should have been at home with my family celebrating this occasion but I thought my presence here today would make a better statement.

Present State of Malaysia-U.S. Relations

The strong foundation that underpins the relationship is the main reason why Malaysia and the United States have been able to expand their cooperation in practically all areas ranging from political and security cooperation, trade and investment, education, science and technology and many other areas. Political cooperation is manifested in the regular contacts at all levels between the two countries. We also cooperate in the context of the United Nations and other multilateral forum. Regionally, Malaysia and the United States have also cooperated in the context of ASEAN, APEC and other regional organizations.

Malaysia and the United States also have excellent defence cooperation. The Malaysian Armed Forces sends some of its personnel for training in the United States. We participate in joint exercise, joint training, exchange of intelligence and high level dialogue. Malaysia also buys some of its defence needs from the United States. This form of cooperation has not only been beneficial in terms of capacity building but also in fostering inter-operability of our defence forces.

Trade and investment is the strongest aspect of our relations. The United States is Malaysia’s largest trading partner and Malaysia is the United States 10th largest trading partner. In 2006 our trade with the United States amounted to US$46.5 billion. The American market accounted for 18.8 percent of Malaysia’s total exports and 12.5 percent of Malaysia’s total imports in 2006. Electrical and electronic products make up 31 percent of our exports to the United States while textiles and clothing make up 28 percent; rubber products 26 percent and wood products 20 percent.

Malaysia’s main imports from the United States are optical and scientific equipment which make up for 30 percent of total imports, machinery and appliances 17 percent, electric and electronic products 16 percent, transport equipment 16 percent and chemical and chemical products 9 percent.

It may be of interest to you that Ohio ranks 24 from 50 states in terms of total exports to Malaysia. Major exports from Ohio include machinery (for manufacturing), chemicals and computer equipment.

We also have excellent people-to-people contacts. Though we are separated by a vast distance the United States is no stranger to Malaysians. Since television came to Malaysia in the early 60’s many Malaysians have grown up on a diet of American television programs. This is still the case today. In the 60’s through the mid 70’s we had US Peace Corps volunteers in Malaysia. The work that they did and the ties of friendship they built left a deep impression on many Malaysians.

In addition many Malaysians have lived and studied in the United States. At one time we had about 23,000 students in the United States. In fact many of the top civil servants and business leaders in Malaysia today are American educated. Though the numbers of Malaysian students have dwindled to about 5,000 today, the United States is still an important educational destination. I would say that people-to-people interaction acted as glue that cemented our friendship. In many ways it is people-to-people interaction that allowed our relationship to withstand the stresses and strains.

Way Forward

I could continue to give more examples of the excellent state of bilateral relations between our two countries. But that is not my aim. Having made the case that the strong bonds of friendship founded on shared values and principles have enabled our two countries to expand their cooperation in practically all spheres, I would like to look forward to how the relationship could further develop.

I believe that there is ample room for political cooperation. As a multi-racial but Muslim majority country Malaysia has certain attributes that makes us a valuable partner. Given our membership in key international organizations such as the Non-Aligned Movement and the Organization of Islamic Conference we could cooperate to promote political cooperation as well as inter-religious and inter-civilizational understanding among the international community.

Though multilateralism is somewhat maligned in the US Administration today, it is indeed key to international peace and stability in an increasingly complex world. This is an area where our two countries could certainly work together. Having served in more than 20 peacekeeping operations Malaysia’s extensive experience in this area could also be an opportunity for cooperation.

I have no doubt that trade and investment cooperation would certainly continue to expand and flourish. Our strategic location at the heart of East Asia and our world class infrastructure makes us a natural gateway to penetrate the region. In addition, with the full implementation of the ASEAN Free Trade Agreement and the various free trade agreements that ASEAN has negotiated with its Dialogue Partners as well as the Closer Economic Partnership Agreements with Australia, China, India, Japan, Republic of Korea and New Zealand further opportunities await to be seized.

Though we have moved up the value chain as an exporter of manufactured products the government is already charting the path to facilitate Malaysia’s entry into future growth areas. Bio-technology is one such future growth area for Malaysia and the United States to cooperate. The National Biotech Policy charts a 15-year course that will ultimately make Malaysia a biotechnology and R&D hub by 2020. The ultimate aim is to derive 3 percent of the Gross Domestic Product from biotechnology. For your information at the recently held Biotechnology convention in Boston, the third largest contingent of participants came from Malaysia after the United States and Canada. This reflects our seriousness in making headway in this area.

Recently Malaysia sent its first astronaut into space. He was trained by the Russians. It has been suggested that Malaysia might also be looking forward to having its future astronauts trained by NASA. I am personally excited about this kind of cooperation as it shows that we can even work together in outer space. Hence literally the sky is NOT the limit for Malaysia-United States cooperation.

The third area is regional integration. Despite its turbulent past, the East Asian region has transformed into the fastest growing region in the world. ASEAN which began as an inter-governmental association designed to reduce interstate rivalry in Southeast Asia today is the leader in regional integration and cooperation. The numerous forums with ASEAN at its core such as ASEAN + 1, ASEAN + 3, East Asia Summit have fostered regional integration. Even the antagonistic Northeast Asian countries have started to work with ASEAN through these forums to forge closer cooperation in East Asia.

In 2005, the first East Asia Summit was convened in Kuala Lumpur. Through their inter-locking and overlapping structures these forums are now aimed at ushering in a new regional architecture. Malaysia has been at the forefront in pushing through ASEAN and East Asian integration. In fact the ASEAN+3, the East Asia Summit and the ASEAN Charter are Malaysian initiatives. It is our belief that the US has an important role in this regional integration and the evolving regional architecture.

The fourth area is regional security. Malaysia and the United States have cooperated well in the area of counter-terrorism. The United States has extended valuable assistance to the Southeast Asian Regional Center for Counter Terrorism (SEARCCT) which is located in Kuala Lumpur. Of late non-traditional security concerns such as piracy, drug trafficking, small arms trafficking and human trafficking have come to the fore as security concerns. In addition we have seen the emergence of new emerging threats such as SARS, Avian flu, environmental and natural disasters. I therefore believe that in addition to traditional security concerns, Malaysia and the United States can also increase cooperation in the non-traditional security areas.

Ladies and Gentlemen,

The subject that I’ve been chosen to speak about is a very complex one indeed. I have argued that this relationship has been durable because it is founded on shared values and principles. I have also provided a rough sketch of how the Malaysia-US relations have developed and matured in the last 50 years and argued that we have a good future ahead. As a final note if I were to compare the relationship to stocks and if I were a stockbroker I would advise to “Buy and Hold” as this stock has much upside potential.

I thank you for your attention.


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Please address submissions to the attention of Jane Walker Snider.

ACWA Speaker Visit

Ilango Karuppannan visited Akron, Ohio, at the invitation of the Akron Council on World Affairs (ACWA). He provided a formal briefing session for high school students participating in ACWA's award-winning Global Scholars program. Students attending the briefing prepared in advance with study materials based on four current Malaysia issues. Mr. Karuppannan was the guest speaker at ACWA's evening "Dialogue with the Speaker" program. ACWA arranged a meeting for him with executives from manufacturing companies and economists in the Northeast Ohio area, to discuss business opportunities.